Why Utilities have already lost the “War on Net Metering”

As state legislatures gavel in their 2017 sessions, a new crop of anti-net metering bills is being pressed forward by utility and fossil fuel lobbyists. By alienating customers, they are only accelerating the decline of their own industry.

The plethora of news concerning federal energy and environmental policy coming out of Washington is sucking all of the air out of the room when it comes to the discussion of some of the most vital debates over renewable energy production that are happening at the state level. Wyoming and Indiana are two of the latest states to face major statehouse battles over solar and wind production. Wyoming, the nation’s largest producer of coal, is looking at essentially banning wind power altogether and curtailing solar production to the point of insignificance. In Indiana, Senator Brandt Hershman has introduced a bill to eliminate net metering in a state that already lags far behind the rest of the nation in installed solar. Not surprisingly, Senator Hershman is a member of ALEC—The American Legislative Exchange Council—which is funded by the fossil fuel industry and the Koch brothers.

Despite the highly funded and highly organized strategy, ALEC seems to be completely oblivious to the fact that their jihad against net metering is actually driving market-based solutions to make net metering obsolete, as well as their own central station generation model.

“What’s interesting about the attack on solar is that it’ll only delay the inevitable. Rooftop solar energy is now cost effective in most of the country if net metering is in place, which is why utilities are trying to add fees or undercut net metering rates. But as fees, like demand charges or fixed charges, go up, it will drive customers to solar + storage, which utilities can’t control as easily.

As the cost of solar and batteries comes down, it will eventually be economical to generate electricity on your rooftop, store any excess created during the day, and then use stored energy at night. This wouldn’t require any energy exports to the grid, meaning the utility would have few methods for punishing customers who choose to go solar. If they did, customers may eventually find it economical to cut the grid altogether.”

Bingo.

As state-sanctioned monopoly utility providers continue to press for regulations that penalize indie solar producers through ridiculous usage and maintenance fees, unfair rate structures and pricing schemes, they are essentially telling those indie solar producers that they don’t want them as customers. Because they are monopolies, they have been able to break their opponents in the past by outspending them on lawyers and lobbyists. That is all changing now, as storage comes of age. Soon, indie solar producers can simply flip the switch and disconnect from the grid, while flipping the utility industry the bird.

Bloomberg Technology recently ran an article entitled “Tesla’s Battery Revolution Just Reached Critical Mass” which shows that large-scale battery systems are soon going to be competing with natural gas peaking plants on price. These same advances in large-scale storage will also apply to smaller scale storage.

A report from the Rocky Mountain Institute has shown that grid-tied solar, particularly solar/storage systems, provide multiple services not only to the user, but to the utility company and its other customers… “To understand the services batteries can provide to the grid, we performed a meta-study of existing estimates of grid and customer values by reviewing six sources from across academia and industry. Our results illustrate that energy storage is capable of providing a suite of thirteen general services to the electricity system. These services and the value they create generally flow to one of three stakeholder groups: customers, utilities, or independent system operators/regional transmission organizations.”

To be fair, many progressive utility providers are starting to “get it.” As the price for solar and storage continues to drop, the pressure is reduced to build new, expensive transmission upgrades and natural gas peaking plants. It’s just a matter of dollars and cents. But as long as ALEC continues its campaign, and as long as legislators continue to be influenced by contributions from fossil fuel producers, they will continue to fight a battle that they simply cannot win.